American drivers who purchase "newer" diesel cars, trucks and SUVs will soon be eligible for the same kind of tax incentives as purchasers of petrol-electric hybrid vehicles under a new national energy plan expected to be signed into law soon by US president George Bush, the Diesel Technology Forum (DTF) said.

The forum cites US Department of Energy reports that if diesel vehicles reached a 30% market share by 2020, it would reduce US oil consumption by 350,000 barrels a day.

From January 1, 2006, the new law allows consumers who purchase some new diesel-powered cars, light trucks and SUVs to be eligible for up to $US3,400 in tax credits based on the weight, fuel efficiency rating and emissions level of the vehicle, as determined by the US Environmental Protection Agency. The credit is available until December 31, 2010.

"These incentives are an important step in expanding the market for energy efficient vehicles," said a DTF spokesman. "When Congress first enacted tax incentives for hybrid vehicles in 2001 there were just two hybrid models on the market. Thanks in part to those incentives, there will be nearly 10 hybrid models for sale in the US by the end of the year. Now that diesel vehicles will be eligible for the same advanced-vehicle credits as hybrids, we - along with a growing chorus of industry analysts - expect similar growth in the clean diesel market."

Last month JD Power and Associates reported that diesel and hybrid vehicles are expected to account for 11% of US auto sales by 2012 - with the diesel market increasing from 3% market share in 2004 to 7.5% by that date. According to RL Polk data compiled by DTF, diesels have already seen 56% market growth over the past five years with the introduction of four new models in 2004 alone (Jeep Liberty CRD, Mercedes E320 CDI, and Volkswagen Touareg and Passat). This is in addition to the continuing popularity of diesel engine options in medium- and heavy-duty pickups.